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Nationwide has launched a new fixed-rate cash Isa paying 2% – but you have to be willing to lock your money away for five years. The buildings society’s offerings come at a time when people are flocking away from cash Isa products. In the 2015-16 tax year, 12.4m adult Isas were subscribed to, but this plummeted to 11.1m in the 2016-17 tax year – a massive drop of 1.6m.

Cash Isas also experienced their poorest performance last year with the average return for 2017 reaching a measly 0.93%, according to Moneyfacts. Nationwide’s offerings may be appealing at a time of low returns, but as the base rate is forecast to rise again this year, could locking away your money jeopardise your savings?

Best five-year fixed-rate cash Isas

While the average cash Isa[1] rate has improved from 0.93% last year to 1.09% this year, it remains lacklustre compared with the 1.42% seen in 2016.

How does the base rate affect savings?

While the base rate represents therate at which the Bank of England (BoE) lends to commercial banks, it also influences the rates that high street banks offer borrowers and savers. Last November the BoE increased the base rate for the first time in a decade, from 0.25% to 0.5%.

The rise came as the BoE attempted to dampen the impact of CPI inflation – which measures the cost of everyday essentials – on the economy. Unless your bank account keeps up with the rate of inflation, which currently stands at 3%, your savings will lose value in real terms.

Will the base rate increase again?

It’s difficult to predict exactly how the base rate will behave, but signals seem to suggest that an increase can be expected around May this year. Although no changes were made to the base rate by the BoE earlier this month, it said that rates will likely rise faster than previously expected due to the strong economy and inflation.

Gertjan Vileghe, a member of the monetary committee that sets the base rate, said last week that the economy was ‘ready for somewhat higher interest rates’ due to a pick-up in wages and a rapid rise in consumer debt. According to the Quarterly Inflation Report[5] published on 8 February 2017, the next base rate rise is forecast to happen in autumn or winter this year, but some economists have said that a rise of 0.25% could come much earlier. A recent Reuters poll showed that 32 out of 57 economists expected the base rate to rise in May.

Should you lock away your savings?

Locking away your savings in a fixed-rate account does guarantee you a certain level of return, which can be reassuring.

But it’s important to consider the impact of a rise in interest rates, and also whether a fixed-rate account could jeopardise your ability to get more competitive returns in the long term. Another factor to bear in mind is that even if the base rate does rise as expected, the banks may not pass on the increase to savers. Despite the base rate rising[6] for the first time in a decade last November, banks were slow to pass the boost on to savers[7].

Vodafone has named Aberdeen as the next place where it’ll be installing gigabit broadband. Work with infrastructure provider and network partner CityFibre will begin on the project this July and the first customers are expected to be able to order Fibre to the Premises (FTTP) services by early 2019. Building on CityFibre’s existing fibre optic infrastructure, which has been in place since 2015, Vodafone will be able to pass a currently unnamed number of homes and businesses across the city with ‘minimal disruption’ promised.

Once finished, customers will be able to experience download and upload speeds of 1Gbps (1,000Mbps), significantly faster than the speeds currently offered by BT and Virgin Media’s G.fast[1] and HFC-based services[2]. CityFibre chief executive Greg Mesch said: “Our commitment to Aberdeen is further evidence of the action CityFibre is taking to deliver Britain’s full fibre future. Our existing network in Aberdeen provides us with an eighteen-month head-start on a full fibre roll-out to nearly every home and business in the city.

While BT is planning on passing 3 million homes with FTTP by 2020[4], Vodafone, using CityFibre’s existing networks, plans to pass 5 million by 2025, but in the shorter term, the companies expect to have passed one million homes across the UK with gigabit fibre broadband by 2021. Vodafone UK’s chief executive Nick Jeffery said: “Our Gigabit broadband services, delivered over CityFibre’s new full fibre networks, will help Aberdeen build on its credentials in innovation and as one of the best places to start a business. It will also transform consumers’ daily lives through superior Internet access.”

While CityFibre has a presence in over 40 UK towns and cities, the partnership with Vodafone will see homes and businesses in at least 10 more locations earmarked for new FTTP connections.

From stamp prices to passport renewals, you could end up paying much more than you bargained for next month. There are a number of price changes that will fall in March that could impact your budget. Which? rounds up the main hikes to be aware of and what you can do now to beat them.

First and second class stamps

Royal Mail has confirmed it will put up the cost of stamps by 2p from 26 March. The price of a first class stamp will rise from 65p to 67p and the price of a second class stamp will change from 56p to 58p. You’ll also pay 3p more if you are positing a large letter.

The cost of a large letter first class stamp will rise from 98p to GBP1.01 and a large letter second class stamp will go up from 76p to 79p. Royal Mail said it was putting up prices to help ensure the sustainability of the Universal Postal Service. It maintains the cost are still among the best value in Europe compared to other postal operators.

You can beat the price hike by stocking up on stamps you’ll need for invitations, birthdays and Christmas before the rise kicks in.

Passport renewal fees

The Home Office is planning to overhaul passport renewal fees from 27 March – and for the first time, it will be more expensive to apply by post. The change is meant to reflect the higher costs of processing postal applications compared to online applications. Below we’ve set out how prices are set to change for a standard 32-page passport:

You can find more of the proposed fee changes for 48-page passports and those that were born on or before 2nd September 1929 here[1].

The proposed changes are subject to parliamentary approval. But if your passport is due to expire this year you might want to renew earlier than you had planned to avoid the hikes. When renewing a passport, any time remaining on your old document is added to the new passport, up to a maximum of nine months.

So if your passport expires before 26 December 2018, you can apply for a new one before 27 March without losing out.

Mobile phone bills

EE is putting prices up for pay-monthly customers by 4.1% from 30 March 2017. The rises are in-line with the Retail Prices Index (RPI) measure of inflation for December 2017. Unfortunately, if you are still within the minimum term of your contract, you won’t be able to switch without incurring a penalty.

But if your contract term has ended, you can leave penalty-free – so you may want to shop around for a new deal to avoid having to pay more. Just be cautious as other providers are also planning to hike prices. Vodafone and O2 have confirmed they will put pay-monthly prices up by 4% from April 2018 and Three will do the same from May 2018.

Energy bills

When you come to the end of an energy deal, you will be dumped onto your provider’s standard tariff. This means you will normally pay much more and be vulnerable to price hikes. There are 46 energy tariffs that will expire in March, according to comparethemarket.com.

It estimates that 60,387 households are on these tariffs that are about to end and could face an average increase of GBP183 a year by reverting to the standard tariff. We’ve listed the deals about to expire in the table below.

If you are on one of these tariffs, you should act now to stop your bills going up. You can compare and switch energy tariffs using Which?